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When income goes up from $20,000 to $30,000, demand for Product A is going up from 300 to 400. The price of the Product A is $200. However demand for Product B is going down from 100 to 50. The Price of the Product B is $10.
1) Is the product A normal goods or inferior goods?
2) Calculate income elasticity of demand for the product A, using the mid-point approach
3) Is the Product B normal or inferior goods?
4) Calculate income elasticity of demand for the Product B, using the mid-point approach
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